Are any of the stocks an obvious buy compared

Assignment Help Econometrics
Reference no: EM13203846

Given the following additional data:
HPG T CSCO
5 year expected dividend growth rate(%):
8.44 4.04 4.68
Long term growth rate after 5 years (%) 5.5 2.0 5.5

Stock Price($) dividend($ annual) Hewlett Packard (HPQ) 25.63 0.48 AT&T (T) 29.39 1.74 Cisco Systems (CSCO) 16.73 0.26

a) Using the 2 step growth model, calculate the price of the 3 stocks.
b) Are any of the stocks an obvious buy compared to the current market price?
c) If you had a stock selected for part b, explain where the analysis may have gone astray.

Reference no: EM13203846

Questions Cloud

By how many degrees did it drop each minute : During a chemical reaction,the temperature in the beaker decreased every minute by the same number of degrees. The temperature was 16°C at 11:08 A.M. By 11:43 A.M., the temperature had dropped to-17°C. By how many degrees did it drop each minute?
At what time has the amplitude of oscillation : At what time has the amplitude of oscillation of a spring-mass system with negligible friction decayed to 1/e of its original value? Does this time depend in a reasonable way on k, m, and c?
Capital for its different operating divisions : what problems might you encounter? What are two techniques you could use to develop a rough estimate for each division's cost of capital and Under what circumstances would it be appropriate for a firm to use different costs of capital for its diffe..
What is the average of the two temperatures : the highest recorded temperature is 136 farenheit and the lowest record temperature is -128.6 farenheit. what is the average of the two temperatures?
Are any of the stocks an obvious buy compared : Given the following additional data: HPG T CSCO 5 year expected dividend growth rate(%): 8.44 4.04 4.68 Long term growth rate after 5 years (%) 5.5 2.0 5.5 Stock Price($) dividend($ annual) Hewlett Packard (HPQ) 25.63 0.48 AT&T (T) 29.39 1.74 Cisco S..
Compute the work required to compress : Compute the work required to compress a spring 2 more cm when it is already compressed 3 cm, assuming that the spring constant is k = 150 kg/s2.
How much will beths greedy father get : If Beth's greedy father imposes a charge of $2 per acre for use of the family mower, how will this affect Beth's marginal cost function How will it affect her profit-maximizing decision What will her profits be now How much will Beth's greedy fath..
Determine how many firms operate in the long run : Suppose there are n identical firms in a market in long run. Each firms cost function is given by C=32+.5q^2, where q is the amount that an individual firm produces. This means that an individual firms marginal cost is given by MC=q.
How many cups of each type were sold at dollar value : how many cups of each type were sold? What was the dollar value of each type of cup sold?

Reviews

Write a Review

Econometrics Questions & Answers

  How many units will the consumer buy in total

Discounting is examined. Suppose that individual demand for a product is given by QD=1000-5P. Marginal revenue is MR=200-0.4Q, and marginal cost is constant at $20. There are no fixed costs. a) The firm is considering a quantity discount. The firs..

  Calculate the new equilibrium level of income

Given the following variables in the open economy aggregate expenditure model, autonomous consumption (C o) = 200, autonomous investment (I o) = 200, government spending (G o) = 100, export spending (X o) = 100, autonomous import spending (M o) = ..

  What bundle of goods will maximize the utility

A consumer enjoys two goods, X and Y. The price of X is $5 and the price of Y is $10 and the consumer has $1500 to spend on these goods. The utility function of the consumer is U = Y √x ; thus MUx = 1/2 Y/ √x and MUy = √x . What bundle of goods wi..

  What is abc incs average monthly revenue

Abc Inc. sells bike tires for $25. It's sales have averaged 8,000 units per month. Recently its closes competitor Efg Inc. reduced their price for bike tires form $35 to $30. A result Abc's sales declined by 1.500 units per month.A. what is the ar..

  How much will be sold and what will the price be

If the industry is regulated in a way that requires it to set P = AC, how much will be sold and what will the price be c) If the industry is regulated in a way that requires it to set P = MC, how much will be sold and what will the price be

  What rate of return would the indians have received

Peter Minuit bought an island from the Manhattoes Indians in 1626 for $24 worth of glass beads and trinkets. The 1991 estimate of the value of land on this island was $12 billion. What rate of return would the Indians have received if they had ret..

  Determine consumption per worker

Calculate output per worker and consumption per worker for each country. Which country has the highest output per worker? The highest consumption per worker?

  Define benefits and m&o costs happen annually

The company interest rate (MARR) is 15%. The company will make a down payment of 25% of the first cost for the Pick-M-Up and 15% of the first cost for Carter's. The loan will have an annual effective interest rate of 10% with annual payments.

  Determine the duopoly firms constant marginal cost

Suppose that in a duopoly firms have constant marginal cost MC = 10 per unit. Firm 1 faces demand function q1 = 100 - 2p1 + p2, while firm 2 faces demand function q2 = 100 - 2p2 + p1. What is the Nash equilibrium of this game. What is the Nash equ..

  Find the cost of 100 compressors of 200 h.p. rating

One hundred compressors of 200 H.P. rating are being considered for purchase by the state highway department. The consumer price index was 400 five years ago and is 520 today. The cost of 150 H.P. compressors bought five years ago is as follows

  Find confidence interval for mean salary of management major

A researcher is interested in estimating the salary of management majors. it is known that the population of salary offers is normally distributed with a standard deviation of 4(in thousands of dollars). the sample yields a sample mean of 50. 1. c..

  What is the optimal unit price p and fixed fee t

A monopoly with constant marginal costs MC = 6 has two potential groups of customers, whose demands are Q1 = 24-p and Q2 = 24-2p respectively. If the monopoly can charge them the same two-part tariff, what is the optimal unit price p and fixed fee ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd